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Related Parties and Variable Interest Entity | 9 Months Ended
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Sep. 30, 2024
Related Parties And Variable Interest Entity [Abstract] |
Related Parties and Variable Interest Entity | Note 13. Related Parties and Variable Interest Entity The Company’s Related Parties NAVER and LY Corporation ("LY", formerly named Z Holdings Corporation) are the primary shareholders of the Parent. Related parties include NAVER's controlled affiliates, Company's management, Company directors, and stakeholders that hold significant influence over the Company. During the three and nine months ended September 30, 2024 and 2023, the Company provided advertising services to NAVER group companies and LY giving rise to related party receivables as of September 30, 2024 and December 31, 2023. Additionally, during the three and nine months ended September 30, 2024 and 2023, the Company received brand-usage and outsourcing services from NAVER and LY, which resulted in the Company recognizing related party payables as of September 30, 2024 and December 31, 2023. In addition to the transactions mentioned above, the Company has a history of renting facilities from its parent, NAVER. Related party operating lease expenses were $1.6 million and $1.6 million d uring the three months ended September 30, 2024 and 2023, respectively, and $4.6 million and $4.7 million during the nine months ended September 30, 2024 and 2023, respectively, with related lease obligations of $3.1 million a nd $21.3 million as of September 30, 2024 and December 31, 2023, respectively (Refer to Note 6. Leases for additional information). The Company also subleases part of its office space to other related parties and the total other income generated from subleases was $0.1 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively and $0.2 million and $0.5 million for the nine months ended September 30, 2024 and 2023, respectively. In April 2022, Studio N, the Company's subsidiary received the NW Media Loan from NAVER, which was transferred to its subsidiary NWMC in June 2022. The NW Media Loan was extended for additional one-year in March 2023. The loan was fully repaid in April 2024 (Refer to Note 7. Debt for additional information for NW Media Loan). In February 2023, the Company issued a one-year loan to its related party, NAVER WEBTOON Company Corporation, for $11.6 million with a fixed interest rate of 5.26%. The loan was extended for an additional one-year with a fixed interest rate of 4.6% in February 2024. During the three and nine months ended September 30, 2024 and 2023, transfers of employees between the Company and its non-consolidated affiliates resulted in the transfer of corresponding severance benefit obligations and cash which is reflected in Payment of severance benefits, net of cash transferred in the Condensed Consolidated Statements of Cash Flows. The Company awarded a non-employee director with 2,832,270 stock options in exchange for non-director services in November 2020. The options contained a performance-based condition which was satisfied upon the completion of the Company's IPO. The Company recorded the transaction as a dividend of $16.6 million and a reduction in additional paid-in capital as the director is employed by NAVER (See Note 1. Description of Business and Summary of Significant Accounting Policies for the treatment of stock-based awards issued to employees of NAVER). eBIJ receives reimbursements from LY for certain costs and exp enses under their platform service agreement. The nature of the costs and expenses reimbursed primarily includes platform service fees, marketing related expenses and other outsourcing fees. For the three and nine months ended September 30, 2024, eBIJ received a total gross reimbursement of $4.7 million and $16.8 million, respectively, which is deducting $2.6 million and $10.2 million for cost of revenue, $1.8 million and $5.3 million for marketing, and $0.3 million and $1.2 million for general and administrative expenses, respectively, in the Co ndensed Consolidated Statements of Operations and Comprehensive Loss. There were no similar related party reimbursements from LY to eBIJ during the three and nine months ended September 30, 2023. On March 27, 2024, the Company’s board of directors approved a merger the LDF-eBIJ Merger, to integrate the Company's two wholly owned subsidiaries’ business and operations, with LDF as the surviving company. The effective date of the LDF-eBIJ Merger was September 1, 2024, and eBIJ was dissolved through an absorption-type merger under the applicable corporate laws in Japan. After the effective date of the LDF-eBIJ merger, LDF became the recipient of the reimbursements from LY as described above. Related Party Transactions and Balances The Company entered into the following significant related party transactions during the periods presented:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, 2024 |  |  | September 30, 2023 |  |  | September 30, 2024 |  |  | September 30, 2023 |
|  | (in thousands of USD) |  |  | (in thousands of USD) |
Revenue generated |  | $ | 21,744 |  |  | $ | 15,452 |  |  | $ | 55,911 |  |  | $ | 62,226 |
Cost of revenue incurred |  |  | 27,318 |  |  |  | 3,143 |  |  |  | 67,780 |  |  |  | 10,286 |
Marketing expenses incurred (cost reimbursed) |  |  | (1,920 | ) |  |  | 60 |  |  |  | (4,861 | ) |  |  | 157 |
General and administrative expenses incurred |  |  | 9,285 |  |  |  | 7,533 |  |  |  | 23,666 |  |  |  | 23,576 |
Other income, net |  |  | 456 |  |  |  | 298 |  |  |  | 3,135 |  |  |  | 51 |
* all expenses are net amounts including reimbursement from its related parties |  |  |  |  |  |  |  |  |  |  |  |
The Company had the following significant balances due from and due to related parties as of September 30, 2024 and December 31, 2023:
|  | As of |
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | (in thousands of USD) |
Due from related parties |  |  |  |  |  |
Receivables |  | $ | 64,412 |  |  | $ | 63,723 |
Other current assets |  |  | 14,749 |  |  |  | — |
Other non-current assets |  |  | 2,523 |  |  |  | 4,243 |
Loan receivables |  |  | 31,979 |  |  |  | 11,633 |
Due to related parties |  |  |  |  |  |
Current portion of operating lease liabilities |  |  | 3,134 |  |  |  | 6,426 |
Operating lease liabilities |  |  | 8,927 |  |  |  | 14,852 |
NW Media Loan |  |  | — |  |  |  | 3,800 |
Accounts payable |  |  | 21,134 |  |  |  | 6,713 |
Accrued expenses |  |  | 7,510 |  |  |  | — |
Contract liabilities |  |  | — |  |  |  | 16,160 |
Other |  |  | 5 |  |  |  | 243 |
Common Stock Private Placement Simultaneously with the closing of the IPO, the Company completed a stock purchase agreement with its related party, NAVER U.Hub Inc. ("U.Hub"), pursuant to which U.Hub agreed to purchase 2,380,952 shares of common stock of the Company for an aggregate purchase price of $50.0 million. The sale of such shares to U.Hub is not registered under the Securities Act and these shares are subject to a 180-day lock-up agreement with the underwriters in connection with this offering. The underwriters did not receive any fees in connection with the sale of such shares. Variable Interest Entity In August 2023, WWS, the Company's wholly-owned subsidiary, entered into a Limited Partnership Agreement with NWMC, a wholly-owned subsidiary of NAVER and a sister company of WEBTOON, to establish Bootcamp Limited Partnership ("Bootcamp") pursuant to Limited Partnerships Act of the Province of Ontario, Canada. Bootcamp aims to distribute or to arrange for the distribution of a film produced by GPM Boot Productions Inc., which is a film adaptation of a web-novel titled Boot Camp published on our platform. WWS is the general partner (“GP”) of Bootcamp and manages and makes all operating decisions over Bootcamp and receives a 1.0% variable interest management fee based on contributed capital. NWMC is the sole limited partner (“LP”) and has no unilateral participating or kick-out rights over the GP. Bootcamp is a VIE over which WWS is the primary beneficiary because the LP with the equity at risk is not able to exercise substantive kick-out rights or participating rights and WWS has the obligation to absorb losses and right to receive benefits that could potentially be significant to Bootcamp. Accordingly, we consolidated Bootcamp into the Condensed Consolidated Financial Statements.

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